Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week we cover the potentially devastating costs of pandemic-related corruption. Read the full story and more news below:
UN Report Warns of Devastating Spike in Pandemic-Related Corruption:
The UN Working Group on Business and Human Rights presented their report “connecting the business and human rights and the anti-corruption agendas” to the UN Human Rights Council. They called on governments to implement more robust legal and policy measures stating that criminals have been using the COVID-19 pandemic to profit from peoples’ suffering. The working group highlighted the risk of inaction by emphasizing that "if medicines are diverted because a bribe is paid, innocent people deprived of treatment could die."
A few prime examples of this suffering include purchases of substandard ventilators in Bosnia and Herzegovina and falsified ventilators which are potentially dangerous for patients in Russia and the UK, according to the United Nations Office on Drugs and Crime (UNODC). Also mentioned: COVID-19-related scams in the USA, worth some USD 13.4 million, and affecting more than 18,000 people. The UN agency also cited the Western Balkans, where "organized criminal groups are believed to be involved in money laundering and investing their illicit gains in the production and trafficking of falsified medical products and protective clothing."
Amazon Settles Allegations of Violating U.S. Sanctions:
The U.S. Treasury Department asserted that the violations Amazon had made explicitly applied to items and services sent to people located in Crimea, Iran, and Syria between November 2011 and October 2018, regions that are covered by the Office of Foreign Assets Control (OFAC) sanctions. The Department remarked that “several hundred” Amazon transactions weren’t disclosed in a timely manner. The Department added that it doesn’t believe Amazon deliberately engaged in unlawful activity. The OFAC said Amazon’s system simply “failed to fully analyze all transaction and customer data relevant to compliance.”
Former Unaoil Managers Convicted on U.K. Bribery Act Charges:
The U.K. Serious Fraud Office said that two former managers of Unaoil Group have now been convicted on charges related to a bribery scheme. Prosecutors alleged Messrs. Akle and Whiteley paid more than USD $500,000 to public officials in Iraq to win a USD 55 million contract for offshore mooring buoys for Unaoil and its client, SBM Offshore. A spokeswoman for SBM said, “extensive remedial actions” have been taken at the company, including changes in its top management that were made in 2012. Some legal professionals view the convictions as a victory for the SFO, which has faced criticism for failing to secure convictions or dropping the prosecutions in some of its cases.
Romania and Ireland Fined by EU Court Over Anti-Money Laundering Regulations:
The top court in the European Union fined Romania and Ireland for delays and incomplete application of the bloc’s rules against money laundering and terrorist financing. Romania was ordered to pay the European Commission a lump sum of EUR 3 million, while Ireland was fined EUR 2 million. The court stated that “both member states failed to transpose in full, within the period prescribed, the directive on the prevention of the use of the financial system for money laundering or terrorist financing,” and referenced anti-money laundering rules adopted by the EU in 2015. Those rules reinforced surveillance requirements for banks, lawyers, and accountants and mandated more transparency on company owners.
U.S. Sanctions on Hong Kong Security Law Put Banks in a Predicament:
President Donald Trump signed the Hong Kong Autonomy Act into law to rebuke Beijing’s imposition of harsh national security law in Hong Kong. However, China’s Ministry of Foreign Affairs condemned the passage of the law and vowed to enact retaliatory sanctions against “relevant individuals and entities of the United States.” The act will sanction individuals that the State Department determines are “involved in the erosion” of Hong Kong’s autonomy and punish banks that continue to serve them as clients. Still, Hong Kong’s new national security law threatens to imprison people who “collude” with foreign powers, including passing sanctions like those just triggered by the United States. The competing laws threaten to leave international banks torn between two obligations: one to Washington and the other to Beijing. How are banks going to obey conflicting rules of Washington’s coming sanctions regime and the broad new national-security law?
Saudi Anti-Graft Agency Opens 105 Corruption Cases:
The Saudi Control and Anti-Corruption Authority (Nazaha) initiated 105 corruption cases across the health, interior, power, and education sectors. The cases involve fraud, bribery, and financial and professional corruption. A Nazaha official said the Kingdom would continue to pursue claims of misappropriation of public money and harming state interests. One of the cases involves the arrest of three employees working at the Saudi Electricity Co. for receiving a bribe amounting to USD 604,570 from a French company and opening bank accounts in another country at the request of the company for money laundering purposes. Another case is the arrest of a university faculty member for asking for a bribe amounting to USD 21,328 from several companies working on different projects at the university. The authority also arrested a doctor at the Ministry of Health for violating the regulations at a quarantine facility. These examples are just a handful of the newly opened cases.
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